The overarching question motivating the proposed research is, Does maternal employment affect children's development in families currently or recently receiving welfare and, if so, how? Given the increasing emphasis of welfare policies on employment, a fundamental question is whether moving recipients of public assistance into the workforce will continue to protect the development and well-being of their children. To address this, the proposed study will use data from the Child Outcomes Study, a substudy of the National Evaluation of Welfare-to-Work Strategies (NEWWS). The Child Outcomes Study involves 3,000 families in three sites, all of whom had a three- to five-year-old child at the time of enrollment into the evaluation. Information on children's development in three domains was collected: (1) cognitive development (including a direct assessment of the child's cognitive development) and academic achievement, (2) emotional and behavioral adjustment (both problematic and positive development), and (3) physical health and safety. The evaluation's experimental design allows an examination of the implications of maternal employment both in families who are and who are not subject to the mandate to participate in welfare-to- work activities and secure employment. The proposed research addresses the following specific aims in three Phases: Phase I: identify for whom, and under what circumstances, maternal employment in families currently or recently receiving welfare appears to have positive and/or negative implications for children's developmental outcomes, using (and comparing) OLS regression and structural equation modeling approaches. Phase II: Disentangle "selection effects" from the actual effects of maternal employment, using OLS multivariate regression to control for measured selection, and instrumental variables modeling to control for unmeasured selection. Phase III: Identify, using structural equation modeling, the pathways through which maternal employment in these low-income families has effects on children.